Income Tax Severed Letters - 2020-08-26

Ruling

2019 Ruling 2019-0835131R3 F - Post-mortem Pipeline

Unedited CRA Tags
84(2), 84.1, 245(2)
Summary Under
Tax Topics - Income Tax Act - Section 84 - Subsection 84(2)
pipeline involving creation of high PUC common shares with no price-adjustment clause

Principal Issues: 1) Whether subsection 84(2) applies to the proposed transactions. 2) Whether section 84.1 will apply to reduce the PUC on the shares of the new company received as consideration for the disposition of the shares. 3) Whether subsection 245(2) applies to the proposed transactions.

Position: 1) No. Favourable ruling given. 2) No. Favourable ruling given. 3) No. Favourable ruling given.

Reasons: In accordance with the Act and previous positions.

Technical Interpretation - External

26 June 2020 External T.I. 2019-0806541E5 - Financial dependency

Unedited CRA Tags
60.02, 146(1.1), 146.3(6) – 146.3(6.2)

Principal Issues: Whether a tax-deferred rollover of RRIF proceeds paid after the death of a parent to an RDSP of an infirm child is available where the child did not reside with the parent on a full-time basis?

Position: Yes.

Reasons: According to the facts it is reasonable to consider the child to be financially dependent on the parent by reason of mental infirmity.